Tata Chemicals, on Wednesday, announced its intent to exit from the detergents business. "The company is in discussion with potential buyers for the business and expects to exit from the detergents business during the December quarter," a company press release said.
The Financial Express had, on August 28, reported that the company plans to exit the detergents business as part of an internal restructuring plan. The detergents business, however, accounts for just around two per cent of the company's business. Key Tata Chemicals detergent brands are Shudh and Rakshak.
Tata Chemicals vice president marketing Kapil Mehan also indicated that the cement and urea businesses (which accounts for 50 per cent of business) are also under review. Speculation is, however, rife on the imminent sale of its cement business as well in the short-term.
An official spokesperson of Tata Chemicals had earlier said no decision had been taken on the sale of the cement business but management studies were continuing on long-term marketing and viability issues.
Sources, however, affirm that the management is clearly looking out for a buyer for the cement business, as well. Tata Chemicals' cement is marketed by the Associated Cement Companies. The cement business sales at Rs 52.52 crore in 1999-2000, were higher by 33 per cent over the previous year. The company is into the manufacture of pozzolana portland cement and its clinker production capacity stands at 3.2 lakh tonnes.
Tata Chemicals has, in the recent past, witnessed a host of top-level management changes including the stepping down of managing director Manu Seth. The company has since announced that Mr Prasad R Menon, who is currently the technical director and agri business sector chief at the Nagarjuna Group, will be the new managing director of the company.
The company's businesses have been under pressure with soda ash impacted by Chinese dumping, and urea being a controlled fertiliser suffering from a reduction in the retention price fixed by the government.
Tata Chemicals reported a 35 per cent drop in net profit in the fiscal 1999-2000 to Rs 117.3 crore from Rs 182 crore last year. Sales increased marginally to Rs 1,521 crore from Rs 1,464 crore during the year.
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